Q2 2020 W. R. Berkley Corp Earnings Call
[music].
W.R. Berkley Corporation.
This call today's conference call.
<unk> is being recorded the speakers.
Some other forward looking thing.
Forward looking where it.
Leading without limitation the lease that's an estimate.
Oh gosh.
The new such forward looking statement Asian, Oh, yes, that's a future plans estimates or expectations contemplated by us.
For two our annual report on form 10-K for the year ended December 31st few dozen 19 under other Farley.
A description of the business environment.
In which we operate and the important results.
W.R. Berkley Corporation, he's not under.
For any obligation and expressly disclaim any such obligation to update or alter its fourth result of new information future events or otherwise I would now like.
Please go ahead Sir.
Thank you, Sean Kelly and good afternoon.
Due to a coal.
We have on the phone in addition to myself.
And rich bio executive Vice President.
The financial Officer.
So what we've done in the past.
ER rich is going to lead us through a summary around the numbers in the performance in a quarter.
All right and then get off for a couple of follow ups and I will leave we will be open ended up before.
My questions.
With that rich if you want to get to start there. Please.
Absolutely thank sat premium production gross print.
Well I think $2.1 billion, despite a shrinking economy a rising.
The growth was driven by an overall.
Great improvement and a comparable historic premium renewal retention ratio that Rob will be discussing shortly is a decline in exposures.
Economic downturn as well as the strengthening of the U.S. dollar against certain foreign currencies.
Net premiums written of approximately $1.7 billion was relatively unchanged from the prior years quarter insurance stocks and only 1.5 billion dollar exposure and rate decline in.
Workers' compensation as well as higher reinsurance reinstatement premium.
The reinsurance Humana line excess segment grew 16.5% to about 200 million.
In dollars in the quarter relating to improving markets.
Pre tax underwriting income of 23 acted in the quarter due to approximately $86 million of this compares with 100 million.
Collars for the prior year underwriting income did approximately $20 million of catastrophe losses for civil unrest.
Severe weather related losses. This brought our total catastrophe losses to approximately 146.
$6 million in the quarter were 8.7 loss ratio point did losses represented five.
[laughter] 0.1 of these loss ratios ratio was 67.7.
Compared with 62.4% in 2019.
Probably a loss reserves developed.
Favorably by $3 million, it's in the current quarter.
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Lastly, our current accident year loss ratio, excluding catastrophes was 59.2% what percent a year ago.
Cat property losses, and a change in business mix.
The expense ratio was 31%, reflecting a decrease of a half half a percent compared with a year ago and the 2019 full year.
As Weve in net premiums earned has outpaced.
East the growth in underwriting expenses expense ratio.
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<unk> expenses are considerably lower in travel and entertainment, resulting in relatively flat under.
Writing expenses in dollar terms and the impact from Covidien 19 may cause some variability in there.
<unk> expense ratio attributable to normalized operating costs and investments we make in the business.
The accident year combined ratio, excluding catastrophes and covert 19 for 2020 was 90.2% compared with 92.9 <unk> net investment income decreased to $85 million, primarily due to investment funds as we mentioned last quarter. The net investment income for investment funds Didnt.
Not reflected turmoil in the financial markets due to the one quarter lag Accordingly, we are recognizing the effects of the downturn it.
To a loss of $58 million.
This decrease was evident in the energy financial services and transportation funds.
Purposes, you may want some direction right.
Guarding net investment income for invest we've not received any estimates yet.
From the investment fund man fight any guidance at this time.
A combination of the low interest rate and.
Environment into defensive position, we've taken to enhance our liquidity for years has resulted in.
There for fixed maturity securities.
You'll note that arc.
Crease to almost $2.7 billion as a second quarter and.
Invested assets.
We believe this is prudent given the uncertainty in the financial markets and the economy.
Me.
The fixed maturity investment portfolio, including credit quality of double a minus and reported a significant recovery bring an after tax unrealized gains and.
What are.
On the first quarter of Twentytwenty, the total aftertax X unrealized gain in stockholders' equity improved from an after.
And $10 million to an after tax unrealized gain of $209 million.
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Tax net investment gains in the quarter $78 million realized gains on equity securities of $62 million and a reduction in the allowance for expected credit losses on investments.
Securities is largely driven by fan.
The favorable change in the allowance for.
The improved prices on foreign government bonds.
Our net income in the quarter is $71 million or 38 cents.
It's per share.
Stockholders' equity was approximately $5.8 billion at the ended the quarter, an increase of more than $300 million after share repurchases $18 million.
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Chairs for $96 million at an average price per share a $49.29.
As a result book value per share increased seven point.
It's 7% before share repurchases and dividends.
The company had strong cash flow from up or $7 million, which benefited under the care Act from the deferral of tax payments until July 15th.
The liquidity is strong at the holding company with more than $1.5 billion in cash and liquid investments.
At this point I'll turn it back to Ross. Thank you.
Thanks Rich.
That was great. So maybe.
Clearly a challenging moment for all of us I'm on many different level.
Everyone.
It is appropriately very focused on on covert 19 that I think we're all struggling with the reality that there are more questions and answers.
Hopefully.
The future.
Really the behavior of as many people will check.
More under control and hopefully pharmaceutical solution that is not too far into the distance.
Having said that well get the topic because youre I think it's important that we not lose.
[laughter] realities or factors that are impacting the industry and by extension I would business.
If one thinks back to last year there was.
The firming market.
19, but during 19 its.
We saw it accelerate throughout the year and we saw continued to accelerate into 2020, a very evident in India.
Q1.
The evidence of this was demonstrated at least in part by business, leaving the standard market, making its way to the specialty market and in particular the enough market.
We saw our rate increases that we use an industry have not seen in some number of years.
We could see a reduction in capacity that various carriers were offering.
All of these things are being driven in our opinion by two major fat low interest rate environment and the knock on effect for what that means for investment income.
And number two loss cost trend.
Then driven by social inflation.
Which had been benign for an extended period of time and then in our opinion.
On the industry when it was leased.
It would be much more of an issue.
Drivers that I just referenced.
And quite frankly, I would suggest if you thought during 2019 interest rates were low.
Then you must think that they are really low today.
And if in 2019, you were worrying about loss cost trend in relation social inflation.
You probably should be worried more about it today than you were then.
One needs to be careful.
Well that the current circumstance stemming from covert 19 does not overshadowed the underlying issues that are driving loss cost trend because we expect that this will just be a brief hiatus.
Today, we continue to see business exiting the standard line Big gives way to the N.S. market and specialty market overall.
We continue to see a reduction in capacity being offered.
And we certainly seeing the leverage moving back towards those that are selling the product.
And in part we're seeing that demonstrated by the rate increases that are coming through our release.
You got 13 point of rate in the quarter.
It's worth noting that the rate increases Shane through without a renewal retention ratio coming unfastened, a renewal retention ratio continues to be consistent with what it's been so not just many quarters, but many years are hovering between Ah I would say approximately 80%.
In addition to that another data point that we shared with you all in the past is our new business relativity metric.
Where are we measure the rate that we are getting on new business compared to our renewal business.
For the quarter. It came in at 1.084% what does that mean that means we are getting 8.4% more rate on new business than our renewal business and that is something that we look for an expected because you know more about your renewal book the new business.
[noise] these factors have allowed us.
Maintain a top line.
Well, we have not been able to grow at the same rate, but we did in Q1 or that when we were doing our planning we thought we would be growing acute able to maintain a top line and.
And in addition to that I would add that when we do see an economy that begins to open up again and recover which hopefully as in the foreseeable future. It is likely that that will have a very meaningful positive effect on our topline when you combine growth and the overall economy with what we're able to achieve.
He read front.
Along with business, making its way into the specialty let me give you a little more granularity.
A couple of lines of business this and how we see the pricing in the competitive nature.
I think as it's widely understood the property market rates continued to move up the.
The larger the accounting generally speaking the more the rates are moving up.
Similar story on the G.O. front or I would tell you the the excess and umbrella market very much stands out and quite frankly, both of these product lines need the great that they're getting and probably more.
Professional liability.
It's a very broad spectrum or I would tell you virtually all components of the professional space, we are seeing rates moving up.
Public do you know, particularly on the large accounts.
10 used to stand out and we've gotten to the point, where we're getting rate on rate in a meaningful way.
And I would again would suggest that the industry needs every last penny.
As it relates to workers compensation, which has been marching to the beat of its own drum most other commercial lines products, we've been seeing some level of rate for some number of quarters comp has been moving at a different direction.
We are seeing early signs.
Workers' compensation pricing, maybe in the early stages of bottoming out.
And I would not be surprised as we make our way into 2021. If you started to see a change in trend and rates actually start to move up at some point next year.
Lastly, the reinsurance market.
Clearly has been waiting give or take I don't know color the a decade and a half for perhaps the moment that is upon us.
Things are firming, we'll have to see how much disciplined really returns that market.
As we see that discipline, a return you will see U.S.
More and more and certainly.
Business, we choose to seed to the marketplace.
[noise] rich did a nice job as always covering the loss ratio I just want to attack on a couple of quick observations around that one as it relates a co bid the number both that we put aside for coated in Q1 and now in Q2, when your total that up.
Approximately 75%.
It's sitting and I'd be an art.
Or approximately one quarter is either paid or case with the lions share of it.
Available for incurred but not reported.
I'd also make the comment around a a topic that has been widely discussed and that is what is the impact at least in the short run of covert.
Yes.
I don't think anyone knows with certainty what it is going to be when the dust settles, but certainly without a doubt there our product lines that have found themselves in a situation where frequency is considerably down.
Shouldn't be a surprise to any of us even people sheltering in place and the slowdown in the <unk>.
It is our expectation.
When the economy opens back up you will see frequency, we're trying to a more normal level.
I should also mention on this front.
Result of what we're seeing would frequency our actual versus expected continues to run more benign or the actual has proven to be less than the expected as far as loss activity in many lines.
Most of those lines.
Our longer tail in nature.
You are shorter tail shorter tail for example, auto physical damage or property as rich referenced in his comments.
The Lions share of our business is on design loss ratios. So even when we have a reduction in loss activity, specifically stemming from a reduction in frequency.
That is not reflected in our reported numbers because we again.
The business on a design and loss ratio, which we hold for some period of time as those reserves season out.
Good thing over to the expenses Richt covered this well I would just offer the observation as far as the expense ratio benefiting.
In the quarter I would tell you that you ever take probably 75% does the improvement comes from higher earned premium with the balance coming from we just don't have people getting on.
Trains buses planes or or staying in savings associated with that.
My opinion is that it's fair to assume that the company continues and.
On a normalized number running somewhere between 31 32.
[noise] I'm, not going up a bit labor or the discussion around the investment portfolio again, rich covered that but but I would offer a couple of thoughts.
Briefly.
The investment portfolio.
It's something that we view.
Very clearly through a lens that we think about as risk adjusted return.
There is a huge amount of uncertainty in the world today.
And from our perspective.
We have made we had reached the conclusion I should say that it is better to take a defensive posture.
We have had a duration that has been shortening for some period of time.
And we have quite frankly, not seen much of a reason given where rates are to take that back out there's a limit.
And as far as quality goes we've gone from what I would define as a moderate double a minus.
To a very strong double a minus with chatting with a colleague or earlier today half of our portfolio can get reduced by a notch and we will remain a double a minus.
I think this brings us to one last point that I'd like to make and then I promise, we'll get onto your questions.
When we think about the business, including the investment portfolio.
We think about it as owners.
We don't think about it as people that collector pay check every two weeks, we think about it with a long term view in a sense of obligation and commitment as if we as a team 6500 of Oh in this business.
We think about risk adjusted return.
We think about the uncertainties that are in the world.
And we have made an active decision that this is a moment that we're willing to pay the price for taking a defensive prof posture and for having flexibility given the unknown.
So let me pause there and.
I will tell if we could please open it up for questions.
[laughter] as reminder to ask a question you need to press star one on your telephone.
[laughter] Mistry your question press, the pound or hash key he's done by only compiled it you anywhere else.
Our first question comes from Phil.
[laughter] Deutsche Bank Your line is open.
Yeah, I think in <unk>.
The attritional loss ratio, particularly on the the insurance business side felt like it had a nice improvement in my mind part of the rationale may have been just lower frequency that we've seen on the heels will be economic slowdown, giving Toby and it seems like Rob in your prepared remarks that wasn't the case.
And like the.
I I the way I would characterize it but there certainly was with some benefit as a result of the slowdown.
But please again and understand that much of the difference in actual versus expected or thing or the reduction in frequency does not come through in our reported numbers.
So you will see the impact on the auto physical damage front, a fewer ER cars trucks et cetera on the road.
But you're not going to see that on the auto liability.
You will see that again on the property, but you're not going to see that on the comp or the GE l. et cetera.
So in Rich's comments, you referenced that one of the contributing factors was non cat property.
And it was quite frankly in my opinion, there a couple of different reasons within the non cat property that we had this result, one of them has to do with some re underwriting that we've been doing over some period of time.
Ah and that has come through.
But I would tell you.
Well how much is there any is there any way you can help us kinda conceptualize the frequency benefit versus price versus trends and I think the third metric that you had mentioned was a mix of business.
So I would tell you that there are couple of things that at work here first of all I think we all have a sense that frequency for many product lines is down considerably given the environment.
Number two I think the other piece that should not go unnoticed is that the rate increases that we had been getting for some period of time now that are no longer just on a written basis, but are hitting our earned.
Our meaningful.
Mm.
And I think if you look at our mix of business, which we disclose in lots of public information and you can get a a bit of a.
Glimpse into that in the release I forget which page it is but where we show the mix of business you can see the different product lines and how much of our portfolio would fall under shorter tail products, where that would be coming through in our piano now.
Versus longer tail that would be on a design loss ratio, where you would not see ER and impact of any consequence.
On a reported basis.
Got it Okay and just one one for me it's it felt like if we think back a couple of years ago.
Interest rates were having lower there was reinvestment crushers for the portfolios.
They didn't have an impact of pricing you did <unk> does it feel like reinvestment rates has something changed as rates just dropped below a point, where they are now will leverage the pricing I guess, well I think clearly rates are notably lower now than they were after the financial crisis, what a great recession or.
Or what it whatever you'd like to labeling.
There are extraordinarily low.
In addition to that we clearly you have a.
Federal reserve and counterparts around the world that seen very determined to manage interest rates for at least the moment at least as long as they can.
And finally, you gotta remembered that an insurance company a ultimately it takes time for that book yield to come down as the new money gets invested at lower rates. So from my perspective, I think we're hitting new lows.
As far as.
Interest rates and I think ultimately it will take a little bit of time, but we're starting to see the early stages of it actually having an impact where it's going to hit investment income.
But that takes time, because it's the new money.
Understood. Thank you Sir.
Thank you very much.
Our next question comes from like the run [laughter] line is open.
Hi, Mike Good afternoon.
Hey, Rob a enrich thanks first question.
Regarding that's kobin related losses, and I appreciate the stat on 75% I'd be in our I'm. Just curious if there's any more color you can offer on the on the newly available information or legal developments that are ROE said, we can kind of better understand whether there's potential for that to persist in a meaningful way in the back.
After the year.
So they know work that we have done and obviously, we're in a much better position to try and get our arms around it now than we were when we're talking to you give or take 90 days ago.
But given the work we have done by and large we are assuming that this is going to be more under control by call it or the end of this your early next year.
And.
Yes.
The as far as the activity again, there hasn't been a huge amount there's not a lot paid level or for that matter in case reserves. The lions share of it. It's just sitting there and I'd be an hour and it's just our best estimates as to what we think the impact could could be.
From our perspective, so far.
Workers' compensation has not proven to be a big issue.
And neither has casualty the challenge is more been in the shorter tail lines.
ER and.
Probably a it's something I don't have the numbers in front of me, but I'd say the biggest component of that is event cancellation.
Okay understood that's helpful moving to the topline growth conversation.
It feels like what you're trying to say is that you know clearly your fortunes will be tied to the economy hopefully the economy improves yeah, although there seems to be some other variables comps declined by 20% year over year, So anything else, we should be thinking.
About right you know in terms of Twoq, you being that the Nader or versus you know ongoing choppiness.
Yes, so the way we think about it is.
ER.
The opportunity to make sure that we haven't rate adequacy.
Continues to be there and you can see that in the rate of that we're getting.
We are an underwriting shop and rate adequacy is the the be on end all when we see it in certain product lines, where the rate is not what we think it needs to be I in certain parts of the workers comp market. We're prepared to let the business go with the understanding it'll be back someday when we find the rates to be more acceptable.
The broad point that I was trying to suggest a earlier in the call was.
No we were able to maintain our top line.
Because we're seeing the flow of business.
Coming in.
To the specialty E.N.S. market, we're able to maintain our top line because we are getting meaningful rate increases and in spite of the challenges that everyone faces, including us none of us are completely insulated from what's going on in the economy in society in general.
Those factors are helping to offset those challenges.
And in addition to that if you subscribe as as we do that this will be overtime brought under control.
A lot of the fundamentals will remain in place the economy will recover and it is likely to bode very well for how this business could grow in addition to that is what it may mean for margins.
Okay understood and I guess finally.
Yeah, we saw that you a continued to buy back some stock.
During the quarter.
Any any thoughts on stocks somewhat recovered or any thoughts on whether you still be the stock is as because being attractive from a a buyback perspective.
So.
I appreciate the question, but you know, we're not going to answer that the way you want us to.
But I'm happy to pause my boss is on the phone. He he is the one who is more focused on that than me or are you there.
Here and of course, we always think the stock is attractive it's attractive today.
However.
We are always looking at uses of our capital what we can do with the.
How buying back stock impacts everything.
How big do with our shareholders.
We don't have a single ooh, yeah, our average prices the first quarter was different than in the second quarter.
It's it's a judgments, we make and how we see opportunities.
So so we don't really have a single rule and.
If if there's an opportunity we think at that moment in time is to buy stock attractive at a drug device will do so, but we don't really have <unk> per se.
Good good to hear from you Bill end up best of luck or next quarter. Thank you. Thank you.
Our next question comes from a year and nine Goldman Sachs. Your line is open.
Hi, Thank you good afternoon everybody.
Mike My My first question, just close that better understanding hi, DNR.
What I did not realize in the first quarter was but there are some definitional differences there and just want to me try and how you're thinking about it. So when we talk about from her but not with <unk> do you also include.
Losses sporting events that has not yet occurred.
Yeah, I have a high probability of occurring we have looked at I. So I appreciate the question and let me try and clarifies it.
We look at our portfolio, we looked at our exposures.
We think about how it will be affected by coven.
And that's how we came up with our number so some of it is.
Events or losses that have not even occurred but the exposure is out there and we think that there's a possibility that that could be a loss associated with the exposure.
Okay and.
And is that mainly for short tail lines is that also for a longer tail line have loved enough. We we have looked at the full portfolio.
Okay.
And then my second question a bit more broad [laughter] tool on until some place can you maybe talk about how it's manifesting itself today [noise] doesn't seem like its covert remember that given that you're expecting more Moore's law from a short tail lines, so where or how is the playing out.
The current environment.
Okay in some ways it is cold and related and I think you're going to see a potentially in the professional liability space and example that would be with L. I.
It would be a certainly one specific example, I think there's a reality that we have a at emboldened plaintiff bar.
And we have a at environment and society overall that is.
More empathetic for the moment to Ah so the plaintiff bar.
Good.
That is a reality, whether one likes it or not and the insurance industry needs to recognize that and adapt appropriately.
So is that all sort of [laughter] and for example business interruption Quinn.
Well I think that we have an aggressive plaintiff bar and I was I think we may have touched on in the last call certainly they have reviewed business interruption as an opportunity I.
I think while perhaps its a.
By the friendly environment overall, I don't think the judges are willing to this completely turned back on the words in a contract or a policy, which is why you have seen many of the rulings, though it's still early.
I'm out suggesting that.
Physical damage is required.
In order to trigger business interruption and in spite of the effort so far to suggest the presence or possible presence of covert 19 being physical damage.
Most of the judges that I'm aware of have not subscribe to that view.
Got it thank you for the answers.
Our next question comes from Meyer Shields, Keith through yet and what your line is open.
Great Thanks, and good evening everyone.
Rather want to go a little bit deeper into what you just talked about with the exposure for lines like El <unk> to increase cold and related losses I. Appreciate the fact that there's no, but you're not looking lower loss pick.
Four lines of business, where claim counts were down frequency was down in the second quarter are there any increase provisions for line, where now the reality has changed and maybe in social inflation et cetera make things worse.
We every 90 days, we looked at our loss picks and we looked at the data and we try and assess whether we feel as though we're in a good place. Our general philosophy is that we want to try and.
Air a little bit on the side of cautions recognizing all the unknowns and as those reserves season out we will tighten up that tech, we don't always get it right, but we certainly try and when we get it wrong, we're not shy about acknowledging it and trying to address it.
So.
As far as the specifics of what we're doing with our picks byproduct line.
Generally speaking just not something that that we get into.
At that level of granularity.
Okay Fair enough maybe different question in the past I think Weve works or I've worked under the premise that economic inflection points take three six month actually impact a written premium volumes because that makes sense of let me confirm the current environment can we.
Maybe if we're seeing his recovery continues right now that exposure units have already bought him.
As you know I think one of the tricky part is it really is have things bottomed out as far as good recovery. If you talk to people in New York They might say, yes, if you talk to people in Florida, or Texas, or Arizona or parts of California, I don't think that they would say yes.
So you know ultimately you know we in the United in the in the New York area. We had our experience hopefully we won't have another but we should not lose sight of.
What the recent circumstances in other regions are of the country or are facing and for that matter parts of the world.
So.
My my opinion is that.
It would seem as we saw things looking better in June then they did in May and May was maybe less ugly then than April.
And certainly early returns are for July were encouraging, but we'll have to see.
So I'm a little bit guarded to suggest that you know things are recovering as far as the lead time.
It can be a a couple of months yes.
Okay. That's very helpful. Thank you so much.
Again, if you would like to ask the question that's down one on your telephone. Our next question comes from Brian Meredith, Yes. Your line is open.
Hey, Rob.
That's kind of Brian Horey, Hey, good good fit a couple of questions for you just one could you talk a little bit about what's going on with terms and conditions right now and with the into she's doing it in related is that specifically is there anything you're doing to protect yourself.
Call what do you know one third party liability claims in use mentioned L.I. stuff I'm actually kind of look forward and indeed people go back to work economy does those kinds of thanks.
Yeah. So.
As far as what are what are we doing too to protect ourselves. We are actively looking at our policy wordings.
And we are.
I'm looking to make sure that the policy word is appropriately addressed.
Ah things such as communicable disease.
And.
Related types of exposures.
There are some exposures, where we're very focused on making sure that communicable diseases excluded or some situations, where we use a much finer brush than that.
But we've been actually been a bit surprised that the broader market.
Has not been more active and trying to make sure that they are managing their exposure to communicable disease in general and in particular coated.
I think people were so consumed by what was going on with business interruption. They haven't thought through what does it mean for the liability market.
Both casually as well as professional.
And I think that that's something that the industry needs to be more actively grappling with because there is real exposure there to your point as things open back up.
As far as what do we see happening with Wordings certainly we are seeing policy work things tighten up just the mere fact that business is making its way from the standard market to the specialty or the N.S. market I think as a leading indicator that oh, I see wordings or are tightening up and and coverage that is being provided is is can.
Drafting a bit.
So that I hope I answered your question Yepsen Yeah. That's that's that's very helpful. And then my second question, Rob just conceptually thinking about this.
Definitely corporate bond yields you're kind of looking at WD corporate bond yields is coming in you know you money real yield right now that you're looking at it's the lowest did since I've been working right. So as I look at where we are right now.
Is the pricing environment adequate enough to I guess, one earn a double digit return on equity or even to just or in your equity cut cost to capital at this point.
We think that the rate increases that we are are getting into markets get again, yeah, right and again I can't speak for others I don't know whatever you guys are portfolio, but for us with the rate increases that were getting today. We certainly think we're comfortably above our cost of capital and I based on.
My math, we are are comfortably in the double digit space as far as return goes but there is no doubt you know we need that rate the comments that I made earlier about the impact of this low interest rate environment and what it means for investment income at what it means for the industry's economic model, yeah, but that is real and why.
We are we are very focused on it.
Great. Thank you.
Thank you.
Your next question comes from Josh Shanker with Bank of America. Your line is open.
I think there in one.
Thank you very much taking my call.
<unk> apology <unk>.
Just a couple of questions more investment related insurance related I guess I see that you're moving the money to cashing your shortening the portfolio should we expect that the ER to Q traditional investment portfolio results or if it's a good indicator where the future is going to be in three you decide to redeploy.
All that cash again, sorry, just could you ask the second part of the question can you broke up a little bit I beg your pardon sorry.
Sorry, I should we assume that the Oh to Q result for traditional investment income, it's sort of a good guide what goes to think about until you decide to redeploy the cash that your stockholding right now.
Yes.
Obviously, putting aside funds as far as a core portfolio.
Yep.
And I can you just talk a little bit off you are a result from the arbitrage portfolio for the quarter.
They had a particularly strong quarter a part of it with some other traditional activities part of it had to deal with some activities. They they participate in the around expects.
Oh, that's it's onetime in nature of the 58 million dollar loss and help you shouldn't expect there's a change in how you're deploying that could continue to the future as much as I wish it was a new normal I don't think you should assume that's the case.
Okay and can you just we don't get the number two we now know what the reinsurance recoverable was for the quarter.
I honestly I don't have that in front of me, but either richer or Campbell will make that available.
Well follow up at least you don't mind.
No problem fantastic. Thank you very much and good luck and be six thanks, Josh you to do well.
There are no further questions at this time I'll now turn the call back over to Mr. Robert.
Closing remark.
Okay. Thank you. So until then thank you all for for dialing in obviously, a challenging times, a and a fair amount of uncertainty, but hopefully from our discussion today you have a sense for how the business is well positioned.
From our perspective, we are well positioned in order to to weather the circumstances that we're navigating through or even more so we are well positioned to take advantage of a market when we come out the other side of the tunnel. So I think that is all for US we will look forward to.
Speaking with you in 90 days. Thank you again on top of a good night.
This concludes today's conference call you may now disconnect.
[noise].